Ok, i think i figured out the problem. I had the upload page in a subfolder. In that same subfolder was a web.config file with this setting -- <httpRuntime executionTimeout="240" maxRequestLength="150000" />
But in the root directory, that setting is not in the main web.config. I'm not sure why it didn't matter with the 1.0 dll, but apparently it does with the 2.0 dll, because once i added the <httpRuntime... entry to the main web.config, i don't get the error anymore.
Does that make sense?